Offsetting holiday shortfalls while still employed? No…

Employees are entitled to holidays of at least four times the agreed weekly working hours. For full-time employment, this adds up to 20 days of holiday a year. For part-time employees, for instance working 24 hours a week, the holiday entitlement is reduced pro rata, in that case to 12 days.

Employees often take too many vacation days. Is the employer allowed to offset excess holidays taken by the employee against his or her salary without discussing the situation? This was the question at the heart of a recent dispute before the District Court of Roermond.

What was the background?

The employee called in sick on 22 January 2018. For the next two months, he kept receiving an average of just half his salary. His employer argued that it was entitled to offset the excess holidays taken against his salary, of which it was in fact only paying 70% because of the sick leave. The employee asked for payment of his full wage plus statutory increments.

What could actually be offset while he was still employed?

The Sub-District Court sided with the employee. This was because the law prescribes a restricted number of cases in which an employer can offset claims against salary while the employee is still employed. This can be done, for instance, with compensation, penalties or excess wages that the employee may be due. But not for a claim for too many holidays that have been taken.

Also, the offset cannot exceed one-tenth of the monthly salary. And the employee must always receive at least the minimum wage. The employer can only therefore recover any claims against the excess of wages that the employee receives over and above the minimum wage threshold.

The Sub-District Court ordered the employer to repay arrears of wages and statutory increments. The Sub-District Court stated that this was because, as a professional, the employer should have been familiar with the applicable legislation and regulations and it was its duty to ensure that employees did not take too many holidays. The employer is under no obligation to give its employees time off if their accrued holidays are insufficient. If it does so, however, it will bear the financial burden of the excess holidays that are taken. This is because the law makes no provision for such a case.

And what happens when the employment ends?

The employer has greater scope and power for applying offsets at the end of employment. The reason for this is that it’s the last chance the employer has to offset any outstanding claims. All the employer has to do is ensure that it doesn’t apply more offsets to the employee’s final wage than the wage that does not fall under the amount that is exempt from attachment. This means that the employer must in all cases pay around 90% of the social assistance level to the employee.

The result of this broader power to apply offsets is that the employer and employee can make an arrangement to the effect that any excess of holidays that have been taken will be repaid or offset when the employment comes to an end. A practical tip is to mention on the leave application form that any negative leave balance will be offset when employment comes to an end. This makes the employee aware with every leave application, and he can then decide whether or not to put in the application.